India’s next industrial shift — electrons over molecules, Pg8

Key Highlights:

• The global industrial sector is transitioning from reliance on molecules (oil, gas, coal) to electrons (clean electricity) for power.
• In 2024, nearly half of China's industrial energy was derived from electricity, while India's share was approximately one-quarter.
• Electrification enhances automation, process control, and decarbonization, with electric motors converting over 90% of input energy into useful work.
• China leads in both the quantity and quality of electrons used in industry, giving it a competitive edge in global manufacturing.
• India produces approximately 30% of its steel through Electric Arc Furnaces (EAFs), compared to approximately 70% in the U.S.
• A national mission on industrial electrification is recommended for India, along with increased grid investment and targeted MSME finance.

Detailed Insights:

• The shift from molecules to electrons offers improved efficiency, as electric motors outperform internal combustion engines in energy conversion.
• China strategically prioritizes electrons in its industrial sector, ensuring factories have reliable and increasingly clean electricity.
• China's approach involves investing in grid infrastructure, ultra-high-voltage transmission, and grid-scale storage to promote electron-first industry.
• India's industrial electron usage is limited by legacy reliance on on-site combustion, inconsistent power quality, and policy focus on generation.
• Enhancing scrap collection and standardizing trading platforms can rapidly increase EAF steel production in India.
• Supporting electrified kilns, waste-heat recovery, and Carbon Capture, Utilization, and Storage (CCUS) hubs can reduce molecule use in the cement industry.
• Transitioning MSMEs to electric boilers and induction furnaces requires concessional finance, pooled procurement of renewable power, and technical assistance.
• Embedding digitalization in new industrial clusters reduces power waste, enables demand response, and generates auditable carbon data.
• Increasing the use of green electrons enhances competitiveness, reduces exposure to imported fuel price shocks, and promotes industrial sovereignty.
• India risks Carbon Border Adjustment Mechanism (CBAM) penalties and lost export opportunities without a rapid rise in green electrons.

Key Concepts Involved:

• Electrification: The process of converting systems and processes to run on electricity.
• Decarbonization: Reducing carbon emissions to minimize the impact on climate change.
• Carbon Border Adjustment Mechanism (CBAM): A carbon tariff on imports based on their carbon content.